U.S. dollar closes higher on Taipei forex (update)

2012/08/16 17:41:46

Taipei, Aug. 16 (CNA) The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.018 to close at NT$30.020 as the local central bank intervened to help the greenback reverse its early losses, dealers said.

The central bank is believed to be trying to keep the U.S. dollar above the NT$30.00 level against the Taiwan dollar in a bid to help locally made products remain price competitive globally, dealers said.

The U.S. unit opened at NT$30.020 and moved between NT$29.860 and NT$30.025 before the close. Turnover totaled US$700 million during the trading session.

The Taiwan dollar lost momentum against the U.S. dollar as soon as the market opened due to follow-through selling from the previous session, but regained its footing as foreign investors bought into more shares on the local bourse, dealers said.

A falling Chinese yuan deflated the Taiwan dollar during the session, dealers said, adding that the weakness of the Chinese currency reflected worries over the China economy.

Concerns over China’s economic climate were raised after the country reported an 8.7 percent year-on-year drop in foreign direct investments in July to US$7.58 billion, dealers said.

The fall in foreign investments indicated a flight of funds from China as the country’s economy has been showing signs of a slowdown, dealers said.

Despite the worries over China’s economy, the global financial markets are still hoping that China will come up with further measures to ease liquidity and thus boost its economy, dealers said

Dealers said after the U.S. dollar fell below the NT$30.00 level against the Taiwan dollar, the local central bank stepped in, especially late in the session, to slow down the pace of the local currency's appreciation.